Correlation Between Urbana and AGF Management

Can any of the company-specific risk be diversified away by investing in both Urbana and AGF Management at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Urbana and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Urbana and AGF Management Limited, you can compare the effects of market volatilities on Urbana and AGF Management and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Urbana with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urbana and AGF Management.

Diversification Opportunities for Urbana and AGF Management

0.14

Correlation Coefficient

Urbana  AGF Management

Average diversification

The 3 months correlation between Urbana and AGF is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Urbana and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Urbana is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Urbana are associated (or correlated) with AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Urbana i.e., Urbana and AGF Management go up and down completely randomly.

Pair Corralation between Urbana and AGF Management

Assuming the 90 days horizon Urbana is expected to generate 1.18 times more return on investment than AGF Management. However, Urbana is 1.18 times more volatile than AGF Management Limited. It trades about 0.09 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.01 per unit of risk. If you would invest  392.00  in Urbana on December 28, 2024 and sell it today you would earn a total of  45.00  from holding Urbana or generate 11.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Urbana  vs.  AGF Management Limited

Urbana

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Urbana are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Urbana reported solid returns over the last few months and may actually be approaching a breakup point.

AGF Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGF Management Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, AGF Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Urbana and AGF Management

The main advantage of trading using opposite Urbana and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urbana position performs unexpectedly, AGF Management can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AGF Management will offset losses from the drop in AGF Management's long position.

The idea behind Urbana and AGF Management Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.